"Quite frankly, I'm shit scared of China. The other day on the PBS they interviewed an economics mavin about China's emergence as an industrial nation. According to him, China negotiated a joint technology deal with Volkswagen and General Motors that has provided China with all the basic automobile manufacturing technology. Supposably China is now poised to go into the automobile manufacturing business with a labor cost that is one tenth of ours. Within 5 years the Chinese are going to do to our automobile industry what they already did to our textile industry, i.e. stomp it into the ground. If GM, Ford and the various foreign manufacturers operating in the U.S. go down the toilet then what's going to happen to our economy? I wonder if we can keep this country afloat selling each other fast food and life insurance? "

Mexico has cheap labor and has automobile plants for many years. S Korea of course has cheap labor. Japan used to have cheap labor.
I'm not scared of cheap cars made in China, considering all the laws which effectively protect our automobles they don't have a chance of selling them in America [which I think is unfortuate]. I suppose they might sell to India [another place which has cheap labor and probably several automobile plants]. What is most probable is that China will produce cheaper cars for the Chinese. This will increase the Chinese living standards but it will also consume more oil.
Since gas mileage will probably be an important issue for the Chinese- if their cars are cheaper that will mean that the cost of buying and operating a car will have a higher cost in regards gas prices than compared to what Americans pay. This will result in more of a market share for higher gas mileage.
Finally, if the Chinese don't over regulate their automobile products, this could offer America [and other advanced nations] a huge market for low cost and high efficent cars for the Chinese market- which result in this technology being used in America and resulting in cheaper car and higher fuel efficency.
So, if you want cheaper cars made in America which are maybe the next evolution above the current hybrids, we should get more fully involved in China selling them basically old technology that they will get anyway- though perhaps at a higher cost than if we jump in now.